It’s no joke when debts are unpaid
Money ‘help’ firm accused of making bad situations worse
HERE’S the founder of Debt Compare, Michael Leah, waggling his gut around in the office for a laugh in a video posted online.
I doubt it raised many smiles among unhappy clients of the company, which purports to help people struggling with debts.
Debt Compare says it can discuss your income and outgoings with its “Personal Budgeting Service” to assess how much you can afford to pay your creditors.
It insists that customers are told that the fees it charges do not include making payments to creditors on their behalf.
This seems to have come as something of a surprise to the clients I’ve spoken to, who wondered why they were paying Debt Compare each month if they were still being chased by their creditors.
One of them was Fahed from Essex, who made three payments of £346 to the company, and said he was shocked to be told by his creditors that they were not being paid anything and he was defaulting.
“The whole point of going with Debt Compare was to ease the stress of this and I ended up way more stressed than before,” he said.
Another customer was Ben from Burnley, Lancs – like Fahed he asked not to be identified.
He had 10 debts that added up to about £8,000, and agreed that he could spare £100 a month, with Debt Compare taking £40.
“I was still getting letters and being charged interest by my creditors,” he told me.
“Debt Compare washed their hands of me even though they were getting £40 a month.
“They said I had been told that my creditors would still contact me but that’s not what I was told at the start. I feel that I was misled. “They had at least £500 off me.” The company was founded by Michael Leah, 30, who has since resigned as a director but still works at the business, according to his LinkedIn profile.
The sole director is now Fiaz Ashraf, 35, who’s doing very nicely judging by his social media posts that feature a Lamborghini, a Bentley, a Rolls-Royce and an Audi R8.
The company responded to me through law firm Taylor Price, which said the vast majority of clients were “completely happy”.
Taylor Price added that Debt Compare took only its agreed fees and no one was told that it would pay creditors on their behalf. A third complaint came from a Surrey nurse called Sarah.
“They cold-called me and the person said they were from the Citizens Advice Bureau, that’s what drew me in,” she claimed.
“My affordable repayments were worked out at £400 a month but after the first two went out I was still getting default letters.
“After that they took £40 a month,
it left me in a worse situation than I was in before. When I complained they denied that they would have said they were calling from Citizen’s Advice in their initial call. So I said that they claim to record all calls, so let’s listen to the recording, but that’s not happened.
“I must have paid them around £1,600 in total.”
Debt Compare’s lawyers denied that Citizens Advice was mentioned, saying they “unambiguously explained” who they were and what service was offered.
But Debt Compare did admit apologising to Sarah and refunding £585.84 after taking an early fee deduction one month.
It also admitted “she had not received the best of advice on the matter of potential contact from creditors during the process of adjustment and negotiation of a collective agreement”.
The lawyers also accused me of “actively going around, telephoning their clients and inciting them to post negative reviews”.
Which is pure fantasy.
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They took £40 a month and it left me in a worse position than before